Experts Call on Congress To Mitigate Medicare Premium Hikes

Attendees at a recent forum called on Congress to mitigate substantial increases to Medicare premiums for some beneficiaries, Modern Healthcare reports (Muchmore, Modern Healthcare, 10/14).

Background

In July, Medicare actuaries predicted that monthly premiums would increase to about $159 for such beneficiaries, up from about $105. In addition, the actuaries predicted that deductibles for Medicare plans on average would increase to about $223 in 2016, up from $147 this year.

By law, premiums for Medicare beneficiaries who also receive Social Security benefits cannot rise at a higher rate than increases in their Social Security benefits. Because inflation has been low enough that Social Security beneficiaries might not receive a cost-of-living adjustment next year, Medicare premiums likely will remain the same for most Medicare beneficiaries.

Medicare beneficiaries who do not receive Social Security benefits are not protected from the increases. In addition, other individuals who are not protected from the increases include those who:

• Are newly enrolled in Medicare;
• Have high incomes; and
• Qualify for both Medicare and Medicaid.

The projected premium increases could affect roughly 30% of the 51 million U.S. residents enrolled in Medicare Part B.

Medicare officials are expected to announce 2016 premiums sometime this month. Medicare open enrollment begins on Oct. 15 (Pear, New York Times, 10/5). Under congressional budget rules, Congress must limit the premium increases by Oct. 15.

Obama administration officials have said they are looking into executive action that could mitigate the rise in premiums, such as using a Medicare contingency fund. Further, House Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.) are working on a deal to avoid the increases, but negotiations have stalled (Ferris, The Hill, 10/7).

According to Modern Healthcare, Senate Democrats have proposed a bill (S 2172) that would maintain 2015 premiums for all Medicare beneficiaries. A Democratic Senate aide said the measure is unlikely to pass on its own but could be added to must-pass budget legislation later this year.

Proposed Changes

During a National Coalition on Health Care forum on Wednesday, experts proposed ways for Congress to address the premium increases.

Tricia Neuman, senior vice president at the Kaiser Family Foundation, suggested that Congress:

• Give HHS Secretary Sylvia Mathews Burwell more authority to adjust costs gradually;
• Calculate Medicare premiums in a manner that spreads the increase out among all Medicare beneficiaries, meaning each beneficiary would shoulder a smaller portion of the costs;
• Change the link between Social Security payments and Medicare deductibles;
• Keep premiums level for all Medicare beneficiaries, not just the 70% shielded from the premium hikes; or
• Require Medicare, not Medicaid, to pay premiums for the approximately nine million beneficiaries who qualify for both programs.

Meanwhile, Andrew Scholnick, a senior legislative representative with AARP, warned that Medicare premium hikes could become an annual issue similar to Medicare's sustainable growth rate formula, which resulted in annual "doc fix" legislation to avoid automatic cuts to provider reimbursements (Modern Healthcare, 10/14).